Is Journal Communications, Inc. (JRN) Going to Burn These Hedge Funds?

Journal Communications, Inc. (NYSE:JRN) was in 11 hedge funds’ portfolio at the end of December. JRN has seen a decrease in support from the world’s most elite money managers in recent months. There were 11 hedge funds in our database with JRN holdings at the end of the previous quarter.

In the eyes of most stock holders, hedge funds are seen as unimportant, outdated investment vehicles of the past. While there are more than 8000 funds in operation today, we at Insider Monkey look at the crème de la crème of this club, around 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their top investments, we have deciphered a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Equally as important, positive insider trading sentiment is another way to parse down the stock market universe. There are lots of stimuli for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).

With all of this in mind, we’re going to take a gander at the key action surrounding Journal Communications, Inc. (NYSE:JRN).

What have hedge funds been doing with Journal Communications, Inc. (NYSE:JRN)?

In preparation for this year, a total of 11 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.

When looking at the hedgies we track, Mario Gabelli’s GAMCO Investors had the largest position in Journal Communications, Inc. (NYSE:JRN), worth close to $25.5 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Luxor Capital Group, managed by Christian Leone, which held a $11.2 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Because Journal Communications, Inc. (NYSE:JRN) has experienced declining sentiment from the smart money, it’s safe to say that there were a few money managers who sold off their entire stakes at the end of the year. It’s worth mentioning that Brian Taylor’s Pine River Capital Management said goodbye to the largest stake of all the hedgies we key on, totaling about $0.3 million in stock.. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $0.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Journal Communications, Inc. (NYSE:JRN)?

Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past 180 days. Over the last six-month time frame, Journal Communications, Inc. (NYSE:JRN) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Journal Communications, Inc. (NYSE:JRN). These stocks are A. H. Belo Corporation (NYSE:AHC), Media General, Inc. (NYSE:MEG), The E.W. Scripps Company (NYSE:SSP), and The McClatchy Company (NYSE:MNI). This group of stocks are in the publishing – newspapers industry and their market caps are similar to JRN’s market cap.